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Technology, Innovation, Policy and Climate Fossil Energy: R&D Challenges and Opportunities

Purdue University | April 28, 2016

David Mohler Deputy Assistant Secretary of Clean Coal and Carbon Management, DOE

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Clean Energy & Climate is the Defining Challenge of Our Time

Policy

Markets/ Consumer Preference

Technology & Innovation How do we

address it?

Trend in global greenhouse gas emissions 1970-2010 by sector

Source: UNEP, Emissions gap report, 2012 3

Change in GHG Concentrations

Source: IPCC, 2007

Temperature

Source: USGCRP; http://data.globalchange.gov/file/e6e3a237-48f6-425d-bd31-bf941822180c

Impacts of Warming

Source: Warren, Nature Climate Change, v4, 534–535 (2014)

Natural gas is expected to overtake coal in fuel used for power generation in 2016

8 8

Office of Clean Coal and Carbon Management

Office of Oil and Natural Gas

Strategic Petroleum Reserves

National Energy Technology Laboratory

Office of Fossil Energy

PC Boiler(With SCR)

Sulfur Removal

ParticulateRemoval

Ash

Coal7,760 TPD

STEAMCYCLE

CO2 CaptureProcess*

ID Fan

Air

CO22,215 psia

680 MWgross550 MWnet

CO2Comp.

Flue Gas

CO2 To Storage16,600 TPD

Low Pressure Steam

Optional Bypass(<90% Capture)

CO2 Capture Options for Fossil Energy Generators

Source: Cost and Performance Baseline for Fossil Energy Power Plants study, Volume 1: Bituminous Coal and Natural Gas to Electricity; NETL, May 2007.

PC Boiler(No SCR)

Steam

Bag Filter

WetLimestone

FGD

CO2 to Storage

Ash

ID Fans

~550 MWe

Coal

LimestoneSlurry

Gypsum

CryogenicASU

Flue Gas Recycle

CO2Purification

2% Air Leakage

Coal

Gasifier500-1,000 Psi1,800-2,500oF

Water Gas Shift

Cryogenic ASU

Syngas Cooler

Steam

2-Stage Selexol

Sulfur Recovery

Sulfur

CO2 Comp.

CO2 to Storage

CO2Steam

Reheat

Fuel Gas

Syngas Cooler/Quench

Syngas Cleanup

~100oF

Water

Combustion Turbine(s)HRSGSteam

Turbine

200 – 300 MW

Power Block

2 X 232 MW

Flue Gas

Pulverized Coal (PC) Post-combustion

PC Oxy-combustion

Gasification (IGCC) Pre-combustion

Technologies also applicable to: • Industrial sources (cement, refinery, chemical…)

• NGCC power plants

Carbon Storage Program Overview

Predicting and monitoring CO2 plume and brine pressure front movement, stabilization, and impacts

Developing and validating risk assessment strategies

Mitigating risks such as the risk of leakage from old wells and induced seismicity

Carrying out field tests for different storage types and depositional environments

Monitoring, Verification, Accounting & Assessment (MVAA) Technology Area

• Atmospheric Monitoring and remote

sensing technologies • Near-Surface Monitoring of soils and

vadose zone • Subsurface Monitoring in and near

injection zone • Intelligent Monitoring Systems for field

management

Core R&D Research Areas Key Technology Areas Research Pathways

Geologic Storage Technology Area (Storage Technologies and Simulation and Risk

Assessment)

• Wellbore construction and materials • Mitigation technologies for wells and natural

pathways • Fluid flow, reservoir pressure, and water

management • Geochemical effects on formation, brine, and

microbial communities • Geomechanical impacts on reservoirs- seals

and basin-scale coupled models; microseismic monitoring

• Risk Assessment databases and integration into operational design and monitoring

CO2 Use/Reuse Technology Area

• Chemicals, plastics, minerals and cements (building products)

• Algae and other possible uses

Reducing emissions – the role of gas

Electric power sector CO2 emissions reduction from shifting to natural gas and non-carbon generation in years 2006 through 2014 relative to 2005 generation and fuel mix and efficiency

Source: IEA 2013 World Energy Outlook

Source: EIA 2014 Annual Energy Outlook

Future of Fossil Energy Demand and Generation • Fossil energy reduces its world share of demand from 82% to 75% by 2035, offset by a surge in renewable energy (IEA 2013)

• Natural gas and renewables outpace growth and demand of all other sources world wide

• Fossil Energy remains dominant share (68%) of United States electricity generation in 2040

Projected growth in CO2 emissions comes from gas, not coal

CCS for Coal and Natural Gas Integration of R&D Efforts

US Power Gen: Mixed Scenario US Power Gen: Low-Demand Scenario

Coal continues to play important role in electricity generation

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CCUS needed to decarbonize

We need CCUS Advanced CO2 capture technologies: Many pathways to success

Novel Solvents Transformational concepts and

Advanced Compression Solid sorbents Advanced membranes

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CO2 is captured and concentrated from large sources; then injected deep underground

Capture: Power plants and industrial sources • Pre-combustion • Post-combustion • Oxyfired combustion • High conc. streams

Storage: > 1km depth • Porous & permeable units • Large capacity • Good seals and cap rock

Two main targets • Saline formations (~2200 Gtons capacity

in N. Am.) • Enhanced oil recovery (100’s Gt

capacity; ~100’s B bbls addl. recovery)

Carbon Capture and Sequestration

CO2 Utilization Fossil Energy R&D Program supporting projects coupling CO2 storage with Enhanced Oil Recovery (EOR)

• Majority of large-scale demonstration projects have an EOR component

Small R&D program focused on CO2 conversion • Mineralization, Chemicals Production, Biological capture (algae)

Lab- and Bench-Scale Applications for R&D of Transformational CO2 Capture Technologies for Coal-Fired Power Plants

• Includes funding opportunity for CO2 utilization

• Biological CO2 use/conversion to value-added products

Skyonic Carbon Capture Unit

Project Highlight: Skyonic

• Operational as of October 2014 • Capturing 75,000 metric tons per year

• Converting CO2 into useful, saleable products

Existing Market Mechanisms: Enhanced Oil Recovery (EOR)

65 million tons per year of CO2 to produce nearly 300,000 barrels of oil per day.

Regulatory Framework (Evolving) Financing (Tax Credits and Loan Guarantees)

R&D Demos (integration and learning)

Domestic Oil Supplies and CO2 Demand (Storage) Volumes from “Next Generation” CO2-EOR Technology**

Technology Push Market Pull

CCUS technology development and market mechanisms

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Major CCS 1st Gen Demonstration Projects

Clean Coal Power Initiative ICCS Area 1

Southern Company Kemper County IGCC Project

Transport Gasifier w/ Carbon Capture ~$4.12B – Total, $270M – -DOE

EOR – ~3.0M MTPY 2015/2016 start

Petra Nova (formerly NRG) W.A. Parish Generating Station

Post Combustion CO2 Capture $775 M – Total $167M – DOE

EOR – ~1.4M MTPY 2017 start

Summit TX Clean Energy Commercial Demo of Advanced

IGCC w/ Full Carbon Capture ~$1.7B – Total, $450M – DOE EOR – ~2.2M MTPY 2018 start

HECA Commercial Demo of Advanced

IGCC w/ Full Carbon Capture ~$4B – Total, $408M – DOE

EOR – ~2.6M MTPY 2019 start

Air Products and Chemicals, Inc. CO2 Capture from Steam Methane Reformers

EOR in Eastern TX Oilfields $431M – Total, $284M – DOE

EOR – ~0.93M MTPY 2012 start

Archer Daniels Midland CO2 Capture from Ethanol Plant CO2 Stored in Saline Reservoir $208M – Total, $141M – DOE

SALINE – ~0.9M MTPY 2015 start

Port Arthur, TX: : 1.1 M tons/y CO2

Air Products, 2013

VSA Vessels

Co-Gen Unit

Blowers

CO2 Compressor & TEG Unit CO2 Surge

Tanks

Existing SMR

Operational! 1.6M tons stored so far 22

Boundary Dam, Saskpower Saskatchewan

Operational! 1.1M tons stored /yr

Broke Ground Sept. 2014; On time & budget for 2016 $100/ton CO2 costs; next plant 30% less

PetraNova Project, W.A. Parrish, TX

Anticipated start August 2016

Kemper County, MS – Southern Company

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LCOE and PPAs

WRI, 2014

CCUS – Cost, policy and parity

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Federal Income Tax Benefits – Emerging Proposals NEORI & CURC Welcome Bipartisan Bill to Improve

45Q Tax Credit Issued February 25, 2016; Updated March 17, 2016

$13 billion invested in CCS since 2007 vs. ~$1.8 trillion for renewables*

Only 15 large-scale CCS projects in operation globally

Carbon Capture and Enhanced Oil Recovery Act

• Rep. Mike Conaway (R-Texas) • 23 bi-partisan co-sponsors • Makes permanent the IRC Section

45Q tax credit • Developers need such assurances to

obtain project financing

* http://thehill.com/blogs/congress-blog/energy-environment/273314-yes-coal-can-power-clean-energy#

Evidences more aggressive effort in policy and investment

High-efficiency low emissions (HELE) coal plants deliver major environmental improvement

Current 45Q credit levels increase ratably to $30 per tonne in 2025

Owner-taxpayer may elect to transfer the credits to the taker of the CO2

150,000 tonne annual minimum Placed in service after 12/31/2015,

and before 1/1/2025

CCUS – Commercial Deployment Incentives

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Administration • 48a, 48b, and 45q tax credits • ITC and STC tax credit proposals (2016) • CPP (new source) – CCUS as BSER for coal (1400 lbs/MW-hr) • CCP (existing source) – CCUS as compliance option; tradable

crediting Draft legislation: Bipartisan and bicameral • Hoeven/Conaway & Jenkins: 45Q expansion ($20/$30/$40

uncapped) • Heitkamp & Manchin: Price support (contract for differences) • Whitehouse-Booker: 45T: New proposal for ITC/STC mix Proposed policies • Clean energy portfolio standards; feed-in tariffs; CO2 utilities • Tax-free debt financing; bonus depreciation

Cost recovery is the main issue

Financing: US policies and proposals

Saline Formations: ~43 Mt/y (4 Mt/y)

High Purity CO2 sources within 100 miles of a CCUS target site

EOR fields: ~32 Mt/y; (2 Mt/y)

Low-cost, rapid deployment options for CCUS could help US and others achieve INDC’s

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• 20 heads of state • Countries represent 85-90 % of global R&D investment • Each country supporting a doubling of its R&D

investment over the next five years • Complemented by a private sector initiative

Mission Innovation

Breakthrough Energy Coalition

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• 27 investors & University of California; Collective net worth: $300+ billion • Commitment to invest in innovation emerging from Mission Innovation pipeline • Long term, patient and risk tolerant capital

Mukesh Ambani

John Arnold

Mark Benioff

Jeff Bezos

Alwaleed bin Ttalal

Richard Branson

Ray Delio Aliko Dangote

John Doerr

Bill Gates Reid Hoffman

Chris Hohn

Vinod Khosla

Jack Ma Patrice Motsepe

Xavier Niel

Hasso Plattner

Julian Robertson

Neil Shen

Simmons & Baxter-Simmons

Masayoshi Son

George Soros

Tom Steyer

Ratan Tata

Meg Whitman

Zhang Xin Pan Shiyi

Mark Zuckerberg, Priscilla Chan

iNNOVATION CCS Consistent with Mission Innovation, utilize a regional approach to accelerate the development and deployment of a full spectrum of CCS technologies

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Broad deployment requires: (1) Enabling CCS projects with infrastructure (2) Reducing costs through RD3

(3) Driving deployment with incentives

iNNOVATION CCS Cost and storage goals

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10

20

30

40

50

60

0

50

100

150

200

250

2010 2015 2020 2025 2030

$ / t

onne

Milli

on to

nnes

CO

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2x storage

Every 5 years:

½ cost

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Mid Atlantic

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Mid Atlantic CO2 sources with >50K emissions/yr and within 50mi of a pipeline or reservoir

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Mid Atlantic CO2 sources with >50K emissions/yr farther than 50mi from possible sink

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Mid Atlantic Natural gas storage facilities, pipelines, oil and gas fields, and saline aquifers

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Mid Atlantic

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40

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China, 84.4%

Australia, 3.1%

U.S., 6.2%*

Vietnam, 0.2%

Thailand, 1.0%

Russia, 2.2%

Malaysia, 0.2%

India, 2.7%

Share of global rare Earth mine production, 2014 (USGS data)

*Note: the sole U.S. production operation Molycorp went

bankrupt in 2015

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Resource assessment of rare earth elements in the Appalachia region

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• Trained Work Force • Mining and Reclamation • Mining Supply Chain

• Existing Mining Supply Chain • Mining/Processing Equipment • Fuels/Chemicals • Contracting/Service Firms • Transportation

• Academic Expertise

Coal country has advantages

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Active Projects In Indiana Performer Project End DOE Share New Mechanistic Models of Creep-Fatigue Interactions for Gas Turbine Components

Purdue University 2017-11-30 $260,470.00

Effects of Exhaust Gas Recirculation (EGR) on Turbulent Combustion and Emissions in Advanced Gas Turbine Combustors with High-Hydrogen-Content (HHC) Fuels

Purdue University 2016-09-30 $277,999.00

Advancing Pressure Gain Combustion in Terrestrial Turbine Systems

Purdue University 2018-09-30 $797,181.00

Predicting Microstructure-Creep Resistance Correlation in High Temperature Alloys over Multiple Time Scales

Purdue University 2016-07-21 $156,500.00

Hybrid Encapsulated Ionic Liquids for Post-combustion CO2 Capture

University of Notre Dame

2018-09-30 $1,699,558.00

Novel Functionally Graded Thermal Barrier Coatings in Coal-Fired Power Plant Turbines

Trustees of Indiana University

2016-08-31 $293,519.00

An Assessment of Geological Carbon Sequestration Options in the Illinois Basin - Phase II and III

Indiana Geological Survey - Indiana University

2017-12-17 $1,302,911.00

Midwest Regional Carbon Sequestration Partnership (MRCSP) - Phase II/ Phase III

Indiana Geological Survey - Indiana University

$796,314.00

DOE R&D Projects in Indiana

Questions

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